According to new figures from Quick Move Now, collapsed sales have seen a 9% increase over the past three months and now make up 40% of all sales.
Of the sales that collapsed, 41% failed due to buyers changing their minds about the purchase and a further 24% failed when the buyer was unable to get a mortgage. This suggests growing caution from both buyers and lenders.
Reason for failed property sales
1: Buyer changed their mind about the property and pulled out of sale – 41%
2: Difficulty getting a mortgage – 24%
3: Buyer or seller pulled out of sale due to slow progress – 18%
4: Buyer pulled out of sale after issues identified in property survey – 12%
5: Other – 5%
Danny Luke, Quick Move Now’s managing director, said, “It’s concerning to see that the number of property sales falling through before completion seems to be on the rise again. It is, however, not a huge surprise given the current turmoil in our economy.
“It’s been well documented that measures to boost the property market after Covid, alongside a shortage of stock, led to an overheated market and steep rises in property prices.
“It would be naïve to think that the economic climate we now find ourselves in would not heavily impact the confidence of both buyers and mortgage lenders. Rising inflation and interest rates will have a huge impact on affordability, and anxiety is rising rapidly.
“Just last week we witnessed the removal of 40% of mortgage products from the market and saw a growing number of predictions of a crash. It’s little surprise that the biggest causes of failed property sales in the last three months have been buyers changing their minds and difficulty securing mortgage finance.
“Sadly, I would expect this pattern to continue throughout the final quarter of this year and well into 2023. The government recently announced another stamp duty reduction in a bid to keep the market going, but in reality, any saving made on stamp duty will be wiped out by the rise in interest rates for those requiring a mortgage.”